Payback Period Calculator
Find how many years an investment takes to pay back, from level or year-by-year cash flows, with the discounted payback.
Change the values and press Calculate to work out your own figures.
Level cash flows
Enter the investment, the yearly cash flow and a discount rate.
Show the working
- payback = investment ÷ yearly cash flow
- discounted = −ln(1 − investment × r ÷ cash flow) ÷ ln(1 + r)
Year-by-year cash flows
Enter the investment, each year's cash flow and a discount rate.
Show the working
- add each year's cash flow until the total reaches the investment, then interpolate within that year
How to use it
Enter the investment, the yearly cash flow and a discount rate. Enter the investment, each year's cash flow and a discount rate.
Enter amounts without commas or with them; rates are percentages (5 for 5%). Negative amounts are allowed where a sign means money paid out.
Key facts
payback = investment ÷ yearly cash flow discounted (level) = −ln(1 − investment × r ÷ cash flow) ÷ ln(1 + r)
Questions
How long does $100 at $20 a year take to pay back?
5 years; 7.27 discounted at 10%.
Formulas
payback = investment ÷ yearly cash flow discounted (level) = −ln(1 − investment × r ÷ cash flow) ÷ ln(1 + r)
Sources
Limitations
- Results are estimates for planning, not offers or financial advice; lenders and banks may round, count days or time payments differently.
- Rates are nominal annual rates compounded as you choose; payments at a different frequency use the equivalent periodic rate.